September Observations

Real Estate sales for the month of September are now officially over.

Vancouver Realtor Paul Boenisch, who provides the figures you see on your right, hasn't provided an update yet so we don't have figures for September 28th at this time.

Another realtor (Rob Chipman) has indicated that we closed out the last sales day of September with only 64 sales.

That will make September 2012 worse than September 2008 and the worst sales total for the month of September since 1994 - when they started compiling these records. This, as you know, follows a summer that was just as abysmal.

The chart below shows you those monthly sales (2012 lacks the reported 64 sales on Sept. 28).

Sales in the suburb of Richmond (formerly a HAM hotbed) continue to be horrendous as well.  Early speculation was that there would be an increase in sales (from homes that had drastically reduced prices below assessment), but even this trend collapsed.

There are currently 1,187 single family houses listed for sale in Richmond. As of yesterday there had only been 53 sales.

That puts also Richmond on pace for the worst September since 1994.

(hat tip to Inventory on VCI for both of these charts)

Observer (from Vancouver Price Drop) notes that the downtown core is starting to see price movement on condos available for sale.

It has everyone keenly watching to see what will happen now in October.

As we noted on Thursday, one Vancouver realtor is forecasting weaker sales in the coming months based on historical data. This is a trend which Jesse, from the excellent blog Housing Analysis, originally identified early in September.

Will be see surging inventory to match this anticipated drop in sales?

October/November historically see the pace of listing decline significantly.  If someone was going to list for fall, they usually do it in September.  Does this mean listings have peaked for the year?

Regular VCI contributor YVR2ZRH offers this insightful analysis:

Van West and East SFH were really some of the only places that were up last month over the previous month. West Van was up but Aug was really low so no surpirse. 

Richmond actually fell even more. It is now down really to a basic trickle. However, Richmond sold way more new builds on large price reductions than tear-downs, which did not seem to sell at all. Condo prices are down. On an average basis, we are down pretty much 5% from last month.  SFH prices were actually down on average but there were some really odd movements in median. There has been a recent slow down of the lower priced tear downs but an increase in the higher priced properties (who have not moved for months – so are now getting big price reductions). It’s like a wave motion where these high priced places finally take price reductions – some after 10-18 months. 

Burnaby, North Van and West Van sold about the same at approx 40 units. 

Inventory increases were large in Van-East attached (13%), North Van SFH (22%) and Burnaby (9%) from the previous month. MOI has just reached 12.0 for REBGV (remember that PaulB includes land/multi which REBGV excludes.) 

Sales in final half of month was at a pace which was 5% above the first half. This is typical. September is supposed to be busy – it wasn’t – no matter how you slice it – it was terrible – but September did tick up from August. 

Thus we should see about 1900 units sold this October. It’s a bit to do with the business days / weekend but 1900 is really possible at today’s sales volumes – this will lead to MOI of 9.8 for Oct. That is not really great but it is a turn from Sep. 

October 2012 will not fall to the 2008 levels – not even close – it’s just not possible. Although we are at 12 for MOI now, we can not expect that to continue and can not expect inventory to increase any more. It may end Oct at the same level as Sep – but we are done. The year is over – it was bad. If you take the YTD sales, I think we are the worst in 15 years. Perhaps when we are done, we will be below 2008.

As always the unfolding story of the real estate bubble is fascinating to watch. 

In 2008 the dismal sales were triggered by the Financial Crisis.

This time around sales are coming in worse than 2008. But, unlike in 2008, collapsing sales will not see intervention from government to prop up the market this time around.

Have we only delayed the reckoning that should have occurred in 2009, and it is finally playing out now?

We shall see.

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Email: village_whisperer@live.ca
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Tues Post #2: Total Vancouver Inventory drops 812 listings

Did the market stumble today?

Total inventory dropped dramatically. And despite 300 new listings today, we still ended up with a net decrease of -812 from our total inventory.

Is the market turning around?

The fact of the matter is there were still 188 more listings than sales. The Vancouver market continued it's trend wherein every single day this year we have seen more listings than sales.

So why the big drop?

If you look back at the way inventory ballooned in Feb/March, it should not be so surprising that as the first of the month arrives, massive numbers of listings are expiring.

And because of all those expirations, the first business day of July will post the smallest month-to-month gain we have seen yet this year.

So now the big question.

Will all those seller's who didn't realist today survey the market and hold off on re-listing until fall - after the summer sales slump? 

Or will they see the shifting sands and put their homes back on the market within a couple of days?

Over the next few days we will hear press reports about just how bad June's sales data is.

As noted over on Vancouver Condo Info today, detached home sales in some areas were the worst in 15 years.

Here is the data from Richmond compared to the last 17 years

1995 = 112

1996 = 114

1997 = 144

1998 = 105

1999 = 135

2000 = 128

2001 = 160

2002 = 139

2003 = 166

2004 = 147

2005 = 248

2006 = 170

2007 = 198

2008 = 115

2009 = 204

2010 = 139

2011 = 158

2012 = 73 **June 28

From the West Side of Vancouver

995 = 108

1996 = 133

1997 = 140

1998 = 126

1999 = 152

2000 = 125

2001 = 189

2002 = 150

2003 = 180

2004 = 154

2005 = 185

2006 = 181

2007 = 177

2008 = 108

2009 = 200

2010 = 147

2011 = 213

2012 = 99 **June 28

And from the East Side of Vancouver

1995 = 145

1996 = 175

1997 = 185

1998 = 136

1999 = 233

2000 = 185

2001 = 269

2002 = 203

2003 = 282

2004 = 243

2005 = 303

2006 = 396

2007 = 244

2008 = 139

2009 = 238

2010 = 145

2011 = 180

2012 = 107 ***June 29

(hat tip Inventory for the figures)

Sales have been the lowest in 17 years.

So as you can see, seller's have a giant dilemma facing them.

Pull their homes off the market or realist?

July/August should be interesting months as we watch the market unfold.

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Email: village_whisperer@live.ca
Click 'comments' below to contribute to this post.

Please read disclaimer at bottom of blog.